ANOTHER MOVE DOWN?

Remember what I said last night, there could be some wild swings in the next few days. Today's move will inevitably cause many traders to think that things are back to normal and that we will continue to "melt up". I'm looking today's move as a set up for another move down. I still think we can move up a bit more over the next few days, but ultimately the next easy money play will be to the downside. It is hard to know how far the market can rally because I don't know if I can use the 5/6/10 low for my retracement measurement. There is a debate going on right now as to the legitimacy of that 1000 point drop. I've been using Friday's intraday low for my retracement calculation. If that is correct, we are sitting near a 56% retracement of the move down. I'm looking at the 1170 area on the S&P 500 for the next resistance (maybe 1175). If we get up near these levels, you should consider buying more puts and preparing for another move down. If any bad news comes out overnight, it could accelerate the drop. If you want to be more cautious in your trading, wait until the S&P 500 drops back below 1150 before you buy your puts. You could set up contingent orders, but I can understand if you would want to avoid any computerized orders after last week's free fall. Be careful on any Gold trades. I anticipate more of a deflationary environment over the next couple of years...not inflationary. This means that gold could continue to drop...particularly off these latest highs. The safest position is in cash. If you want to sit out of this market volatility, stay in cash...not gold.